What is my prepayment privilege?

Your prepayment privilege allows the flexibility of paying down a portion of your principal during your mortgage term, without any penalty. This percentage allowed varies depending on the lender. It’s important to look into your prepayment privileges as the more allowed, the quicker you can pay down your mortgage and the less interest you’ll pay!

Our Tips to Avoid or Reduce Payment Privilege

– Make full use of your prepayment privileges: Make full use of your prepayment privileges every year. Any future prepayment penalties will be based on a lower mortgage balance.
– Make a lump-sum prepayment before you break your mortgage. Some lenders restrict your ability to prepay if you’re close to the date you break your contract.
– Wait until the end of your term to prepay: Consider waiting until the end of your term to prepay if your prepayment penalty will be a large amount. You can then make a lump-sum prepayment without penalty.
– Port your mortgage: If you’re buying a new home, ask your lender if you can port your mortgage. This means taking your existing interest rate, terms and conditions with you to your new home. It saves you from breaking your mortgage contract and getting anew one.

It’s so important to shop around. Chat with your mortgage broker to explore your options and find the product that is best for you.